Consolidation of Cases for the Purposes of Discovery

California Code of Regulations, Title 8, 10396, gives the Workers' Compensation Appeals Board discretion to consolidate two or more related cases. This authority commonly is used when a worker claims more than one injury as a result of his or her employment. Consolidation in such cases often is uncontested because it's more efficient for all parties for all of the cases to be heard and decided in a single proceeding.

Consolidation, however, is not limited to cases involving a single employee. CCR 10396 also allows the WCAB to consolidate cases involving multiple injured workers after considering relevant factors, including, but not limited to:

1. whether there are common issues of fact or law;
2. the complexity of the issues;
3. the potential prejudice to any party, including but not limited to whether granting consolidation would significantly delay the trial of any of the cases involved;
4. avoiding duplicate or inconsistent orders; and
5. the efficient use of judicial resources.

One area in which the WCAB has shown its willingness to exercise its discretion to consolidate cases is when there are common issues of law or fact involving the same provider or lien claimant. It will exercise its authority to consolidate a large number of cases if an appropriate showing is made.

Recently, in Erhahon v. Kaiser Foundation Hospital, 2021 Cal. Wrk. Comp. P.D. LEXIS 150, the WCAB affirmed a WCJ's order consolidating 57 cases for the purposes of discovery as to liens filed by a copy service. It also affirmed the WCJ's order staying the lien claims in those cases pending completion of discovery.

The defendant filed a petition alleging that the copy service summited 1,676 invoices in 170 different cases, and serious questions had arisen regarding the legitimacy of the charges. They included whether the services were requested or performed. The petition alleged that in at least one claim, an applicant’s attorney testified that he neither requested nor authorized the services. It also alleged that the copy service stymied all efforts to conduct discovery related to its billing practices in individual claims by dismissing or forfeiting individual bills to avoid discovery. So it filed a petition to consolidate in order to conduct discovery in 57 cases with liens and stay the collection efforts on the pending invoices until discovery was completed.

The WCAB upheld the WCJ’s consolidation order and order to stay the copy service's collection efforts in those cases. It found that the copy service was not denied due process prior to the consolidation order because it submitted an objection to the defendant's petition that was considered by the WCJ. It found that the consolidation order did not infringe on the copy service's property rights because it had yet to prove entitlement to recover on any of the consolidated and stayed claims, and no potential rights had yet vested. It also found that the consolidation order did not interfere with the copy service's right to seek monetary recovery in all cases and was issued to prevent duplication of discovery in each of the 57 cases.

In addition, the WCAB noted that the defendant submitted a sworn declaration detailing how the copy service obstructed its efforts to conduct discovery related to its allegations of fraudulent billing practices in at least 10 cases. The board explained that the defendant had the constitutional right to petition and stay processing of workers' compensation bills and lien claims based on allegations of illegal business practices. It concluded that it was proper for the WCJ to issue an order of consolidation for purposes of discovery, because it was the most efficient procedure prior to consideration of consolidation for purposes of adjudicating common issues of law and fact.

With this decision, it is clear that the WCAB takes allegations of billing fraud seriously. Because the defendant provided specific and detailed allegations regarding how the copy service either failed to cooperate with discovery or stymied its efforts to conduct it, the WCAB was compelled to consolidate the cases so the defendant at least could begin to conduct discovery regarding its allegations.

No question that there will be further litigation as the defendant attempts to question the lien claimant's principals regarding their billing practices. But because the consolidation order involves liens and invoices in multiple cases, the lien claimant cannot avoid participating in discovery by simply dismissing individual bills.

For further discussion regarding the WCAB's discretion to order consolidation of cases, see Sullivan on Comp 15.53 Consolidation of Cases.